The return of the big deal – CBRE
CB Richard Ellis’ latest research shows that transactions in European property investment market increased in size, on average, in Q4 2010, with 79 such deals of more than €100m completed during the final quarter of last year – the highest quarterly total since Q1 2008. Helped by this increase in larger deals, European investment activity levels jumped during Q4 2010 to €38.6bn in total, which was 57% above the previous quarter’s figure.
The firm says the trend towards bigger deals was even clearer when looking at the largest transactions of all, as there were more deals above €500m completed in Q4 than during the rest of 2010 put together.
CBRE says this trend is significant as it highlights the number of active investors with sufficiently deep pockets to conduct such large deals, without needing large amounts of debt; and it also illustrates where the liquidity for these big transactions lies. Almost two-thirds of all the €100m-plus deals completed in the past two years have been in the UK, France or Germany, it points out. Looking more closely at the data, the big deals were concentrated in London and Paris – no other cities recorded more than 10 such transactions during the period.
The return of large transactions is being taken as a sign of investor confidence returning to the property market. CBRE’s head of EMEA capital markets, Jonathan Hull, said that there were many types of buyer in these deals, “including sovereign wealth funds, insurance companies, pension funds, listed property companies and property funds.”
“A growing trend has been for capital sources to partner one another, matching capital from one source with expertise from another,” he added.
Meanwhile among today’s news is the announcement from Lambert Smith Hampton of an office deal on the UK’s south coast that it says is the largest in the region for 18 months. The firm has completed a deal for Cobham to take a 43,000 sq ft office building at Greenhills’ 150,000 sq ft Fusion developmnent at the Solent business park in Southampton.
Cobham is to close three smaller sites at Hartley Wintney, Segensworth and Waterlooville, all in Hampshire, and move several of its surveillance businesses to the single site at the Fusion 2 building. “The quoting rent of £18.25 was agreed, on a new ten year lease. A complete fit-out of the brand new space is currently underway, with Cobham due to take occupation from April 2011,” LSH said.
Steve Williams, associate director in LSH’s South Coast Office Agency team, said that the “green agenda” had played a large part in Cobham’s decision to relocate to the Fusion development. “Matching Cobham’s wishlist to Fusion (a scheme renowned for its energy efficiency credentials) together with Greenhills’ hands-on ability to deliver completion of both the Cat A and Cat B fit-out works ultimately drove the deal,” he noted.
